The Impact of Corporate Diversification on Firm Value: A Study of Select Companies at The Nairobi Securities Exchange

Simple item page
dc.contributor.authorManyuru, Anthony O.
dc.date.accessioned2024-10-23T09:39:11Z
dc.date.available2024-10-23T09:39:11Z
dc.date.issued2014-05
dc.descriptionMASTER OF BUSINESS ADMINISTRATION in Finance
dc.description.abstractThis study provides evidence on how corporate diversification strategies, both industrial and geographical, impact firm value among listed firms at the Nairobi Securities Exchange (NSE). The sample involved 38 companies covering the period 2006-2011. The study sought to meet the following objectives: to determine if diversification affected the value of firms listed at the NSE; to investigate whether diversification affected different industries as classified by the NSE; and to establish the nature of the relationship between diversification and the value of firms listed at the NSE. An experimental research design was used and data was sourced from the firms’ financial statements. Panel regression techniques were employed as the estimation method and STATA (Version 11) statistical software was used to conduct the analysis. The study utilized Tobin’s Q as the measure of firm value. The overall findings of the study were somewhat mixed. The study found that industrial diversification reduced firm value, but geographical diversification did not have a significant impact on firm value. The study also established that ownership structure affected firm value. When investigating each industry separately, the study found that the impact of diversification was not homogenous. Industrial diversification enhanced firm value in the agricultural industry but did not significantly influence firm value in the other industries. There was, however, no evidence of geographical diversification having any significant impact on firm value. The study revealed that the nature of the relationship between firm value and both industrial and geographical diversification was best captured in a linear format. The study recommended that firms listed at the NSE should not engage in industrial diversification; investors should be cautious of firms that are industrially diversified; and firms in the agricultural industry should, however, devote more resources to industrial diversification given that the strategy would improve their value.
dc.description.sponsorshipDaystar University, School of Business and Economics
dc.identifier.citationManyuru, A. O. (2014). The Impact of Corporate Diversification on Firm Value: A Study of Select Companies at The Nairobi Securities Exchange. Daystar University, School of Business and Economics
dc.identifier.urihttps://repository.daystar.ac.ke/handle/123456789/5547
dc.language.isoen
dc.publisherDaystar University, School of Business and Economics
dc.subjectcorporate diversification strategies
dc.subjectindustrial and geographical
dc.subjectimpact firm valu
dc.subjectNairobi Securities Exchange
dc.titleThe Impact of Corporate Diversification on Firm Value: A Study of Select Companies at The Nairobi Securities Exchange
dc.typeThesis

Files

Original bundle
Now showing 1 - 1 of 1
Thumbnail Image
Name:
The Impact of Corporate Diversification on Firm Value.pdf
Size:
303.19 KB
Format:
Adobe Portable Document Format
Download
License bundle
Now showing 1 - 1 of 1
No Thumbnail Available
Name:
license.txt
Size:
1.71 KB
Format:
Item-specific license agreed upon to submission
Description:
Download

Collections

School of Business and Economics